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tv   [untitled]    September 28, 2010 11:30pm-12:00am PST

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where there are calculations being made. the problem is it scores a red, or very low, on cost of service, because you typically cannot closely align the cost of service. delivering a piece of mail to virginia takes a lot more cost and delivering mail to palo alto. that is a classic example for us delivering a lot of power to a big customer versus a little power to a household. there will be cost differences in uniform does not allow you to adjust. the other example would be energy efficiency conservation. if you charge everyone the same price, it is not a good policy lever because they are not provided incentive to conserve. what is interesting is we are looking at these different rate models and looking at the criteria the charter requires and are seeing how dependent upon the great design
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methodology that we looked at, and we are going to look at all of them -- rate design methodology that we look at, and we are going to look at all of them, there are going to be different advantages and costs. for instance, getting over to time of use and seasonally adjusted is not easy to communicate, but it allows us to possibly implement policy directives and policy issues that are important to the commission. the rates to be considered in early december specifically our retail, residential, and commercial rates. we will also bring back before you a summary of the department
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of rates and work orders for the general fund rates that the irrigation district and others are being charged. we will provide suggestions on efficiency and demand response incentives to attempt conservation. we will be including in that report a proposed low income medical discount like the lifeline provision under the charter. we will look at the cost of service associated in the current budget, for example the $5 million subsidy for go solar sf as a public policy charge. we will also look at net energy metering, which is technologically very easy to do and would not require any special meeting for us. what we would then plan for
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future rate studies would be looking further at economic development areas to the degree there are special incentives to be in a special development tom, kind of like enterprise zones. -- special development town, kind of like energy zones. what we are doing now is saying here is what power we have and who currently use is it -- uses it and has a drop on it. to an extent that there is a surplus or a tight power supply, there is a flexibility you could potentially have. with that, i am happy to answer any questions or hear whatever thoughts or additional policy criteria you would like to consider. >> thank you, todd.
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vice president vietor: i have a couple of thoughts. thank you. it is so great to sit through your presentations because you make all this complicated information easy to understand. it is a little simpler. on these desirable rate attributes, there is efficiency and conservation, but what about removing from the loud, like grenoble's -- removing from the load, like renewables? it seems like that would play into that matrix in some way. >> you are right. that could also factor into that energy metering and how it could be removing the load need. vice president vietor: we know there is cost associated double have to be factored in. >> we will look at that. vice president vietor: this time of use and seasonal piece, it is
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interesting, coming from san francisco and whether we are having now. it is our season but it is unseasonably warm. -- coming from san francisco and the weather we are having now. it is our season, but it is unseasonably warm. there might be additional load impact as we move forward in the next 10 to 50 years. i know we are doing shorter-term rate setting, but it seems like we might want to do some review and forecasting on that as well. i also think it would be interesting to see what power rates are needed and when, and that is sort of the question for ms. hale. i know we have probably reviewed this before, but this pie chart is great to see. how much has that changed over the last two to five years, and are there any projections of how
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that could change? i know you were saying that we are developing the 1% peace, and that could grow. -- 1% piece, and that could grow. there are big developments in the next years that could affect the loud and therefore the rates. >> we are including a projected load and updating the 10-year financial plan and what it would look like. we are looking at a median water year, a wet weather year, and a dry weather year. that will provide with the scenarios that are most likely are. vice president vietor: that sounds great. my last piece -- on the future developments, i would like to see something on distributor generation and where that could get us if we look at development coming on line as we move toward shutdown of our plants and any kind of distribution opportunities throughout the city, if that would affect our
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right. -- our rate. not to give you any more work to do. thank you. commissioner moran: how does this effort relate to the cca process we are going through? >> this is specifically what is not in mthe cca. this is everything else we do now currently. the cca is a unique stand-alone entity that would be reviewed and prices set and proposals reviewed based upon its own procurement of power in the marketplace of whatever level it is adopted. commissioner moran:
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this is where we really are as a power provider. cca is the generation. this happens at hunters point, this happens in treasure island. cca is the distributor, they do all of the work. >> the interface would be in those circumstances where if we were to provide power to them. >> that would be a separate rate schedule providing at a wholesale level.
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>> what our current budget is is what they're selling to the housing authority. this was projected in the 10- year capital plan. the peace we are adding would be the additional new housing on treasure island. we also need the commercial shipyard and the trans bay area. >> does this include city hall? >> it does. we will be able to look into
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these based upon the current rates we are looking at. what this would mean for the levels of rate setting. >> in your chart, that looks on awful lot like the criteria that we would have to restore water and sewer rights. if you go to the utility version of the world, they are allowed to recapture the expenses and the cost of debt plus a rate of return. you have an envelope that you are working with and you have to choose how you will divide that up and down -- divide that up. one of the things i have felt a light-a lack of is the lack of
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that kind of envelope. it is hard to know if you're given subsidies. wind do you start making the subsidies? it is hard for us to establish either an envelope for a bottom line. this involves a series of policy questions and the true retail we have talked about is coming up with a pg&e a equivalency and this is not what we are looking for. it would be nice to think that on our subsidized rates, the bottom line was cost recovery. i would appreciate some consideration in this process of
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how we set policy objectives. this gives us a way of making trade of choices -- trade-off choices. >> i would be happy to be part of the general managers' report and share how this is going with the consultant. some items we have covered are the assumption of the credit rating. we have made a very good progress on this. we would get a power credit rating. this should also be will for you
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in the. remaining walking through what the implications are. the other alternatives we have had is marginal cost pricing verses average cost pricing. we know that we have a very efficient system that reduces prices add a variable cost. that gives the commission more flexibility. how we choose to share or divide up that cost, we want to show you where the rates are today and where they would be and how they compare to the costs from pg&e. there is securities rate of return on capital and how that specifically looks at how the rates are proposed.
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ultimately you decide how those rates are set. >> i have one clarifying think on your question, if we will buy the power generation, would that affect the rate? does that need to be an attitude or whatever you would call this to be able to say that maybe that is the cost of service line? >> we will be providing the power that is generated. >> we will do this on the open market or hopefully investing in windfarms and hopefully that would be provided to pg&e.
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they're similar questions on how we charge for the generations . >> is to any public comment? >> commissioners, in this discussion to make things simpler, but we don't follow some of the main elements to analyze empirical data. for example, you should know that every 10 years we figure
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out of the housing element. how should we subsidize the developers backed right redevelopment then constituents of san francisco that are against it. who is building the power plant? are we having a discussion where we will provide some energy at this point? i might add treasure island and the trans bay. the commissioners at some point will have an orientation about the rate cut and how municipalities including the military or subsidized. how the changes were made in
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public housing where at one time they were given free energy and they don't have to pay for it. how did that come about? things have changed drastically because we have quarry's will -- that will generate income. this is like a corporation. if we're going to address something like this, we will be asking questions like this. we will be asking what -- for the population of san francisco.
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how many residences do we have that consume a lot of problems? i think someone must rock the boat. very few commissioners are asking the right questions. you have to be educated on issues. think you. -- thank you. >> i am representing the san francisco green party. we have been working for community choice aggregation implementation. i want to emphasize on the questions that were asked, this is a profoundly in question -- important question.
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we have said it doesn't they will likely be setting up -- power and the purpose would be so it it is easier for the cca system to meet or beat prices from pg&e. if you have this huge cca drying up possibly all of your power into the systems, that will profoundly changed the situation. cca will probably get under way in the next year purchasing and than a year or two after that,
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construction and installation. it is very likely that the cca will give some of that power. there are all kinds of factors that need to be studied and i know it is more work. i don't understand how this can be done without doing detailed studies on what is likely 4 cc a. -- for cca. this will profoundly affect your supply. i would suggest that the
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contractors that and staff look at how this will play out. >> thank you. next item. >> item 11, discussion of possible action to authorize a general manager of the san francisco public key to this commission to establish charges for the electric power. >> have you any questions? item 11. i will entertain a motion if you wish to adopt. >> so moved. >> seconded.
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>> are there any questions? all those in favor of adopting item 11. the ayes have it. >> item 12, discussion and possible action to authorize the general manager to request that the mayor recommend to the board of supervisors approval of a supplemental appropriation in the amount of $8,400,000 to fund the preliminary planning, engineering, and design work for the city's of silvery water supply facilities improvement program as authorized as part of the proposition b earthquakes safety and emergency response bond, authorize associated costs to be reimbursed by bond proceeds, a pump to the findings pursuant to the california
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environmental quality act. >> are there any questions? >> we have no speaker cards. >> i will entertain a motion. >> i will move. >> second. >> i have a question. where's pump station number one and where is pump station number two? >> that is a very simple question. i will know that next time. >> pump station number one is at the corner of second and -- ion. the said the station is at fort mason. that is very old and
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interesting. this is all very old but it still works. >> there's been a discussion for some time of having a guardians of the city museum that will be a combination of police, fire, paramedics, sheriffs, first responders, just about everyone else. they're hoping to announce as soon as possible possibly in october that they're looking to be involved in the retrofit of that facility to possibly make it something like the cable car museum. >> any public comment?
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>> thank you. there has been a motion to adopt. all of those in favor, please signify by saying aye. the motion passes. >> item 13, discussion and possible action to authorize the san francisco public it is commission on general manager to request that the mayor recommend to the board of supervisors approval of a supplemental appropriations substituting revenue bond proceeds as a source of funding for previously anticipated $30 million of state grant funds included in the waste water enterprise's capital improvement project budget, $20 million in fiscal year 2010-11
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and $10 million in fiscal year 2011-12, and including financing costs of $3,846,000 in fiscal year 2010-11, and $928,000, in fiscal year 2011-12 and submit a proposed ordinance authorizing the issuance not exceeding $34 million. >> if i can walk you through the important points of this item. the overarching item here is that the delay of the state program. if i can turn the clock back to 2006, voters approved a general obligation bond to cover disaster preparedness and flood mitigation management.
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$4.1 million took until 2008 for legislation to be able to get a portion of the appropriation. two years have passed. over the last two years, our staff has been working very hard to try to bp near the front of the line to try to do our grant application and working with our staff on guidelines and other kinds of criteria. the good news is that the state finally in august of 2010 issued a proposal solicitation package which is a very good planning and for $212 million, they will be allowing the applications to come in up until april, 2011, but they will not have the
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public hearing, review recommendations, and reward grants until september, 2011. in our budget, we provide all projected available sources and we made our best attempt to try to provide the state whatever they needed. what we assumed of $20 million of sources, the state has said at the very soonest this will not be issued until september, 2011. we have taken the existing plan, the project would stay exact -- exactly the same that we have moved the proceeds up a couple of years and projected the grant proceeds that will leave those trailing a couple of years until we next visit the plant, you will see that the numbers are still similar but the timing of
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the grid vs. the revenue bond in basically provides a substitution of those two sources. over the 10-years, the same number of bonds, the same number of grants. the appropriations substitution is required because on the source cited the budget, even though the use is the same, another is slightly different because of the revenue bond verses the grant. when we do these, we have financing costs. we would be able to keep our existing rates just as they are through 20-14 -- through 2014. we are always reviewing the projected rates for the next 10 years as part of your budget deliberations. in many ways,